Why Set Up a Joint Stock Company in Sweden


Sweden is bounded on the North and North-East by Finland, on the East by the Gulf of Bothnia, on the South-East by the Baltic Sea, on the South-West by the Öresund, the Kattegat, and the Skagarrak, and on the West by Norway. Sweden is fourth in size among the countries of Europe, and the largest of the Scandinavian countries, with about 15% of its total area situated north of the Arctic Circle.

The Kingdom of Sweden is a parliamentary state under a constitutional monarchy.  The country has been a member of the European Union, EU, since 1 January  1995.

Sweden has one of the most open and competitive markets in the world. It is a world leader in telecom, computers, electronics, robotics, pharmaceutical, and medical products and biotech and is regularly listed as top in the world in terms of high-tech readiness and receptivity.

Public limited liability company in Sweden – AB (publ) (Publiktaktiebolag)

In a Swedish joint stock company,  there must be at least 3 board members and an optional amount of deputy members. It is also compulsory to appoint a managing director and that must not be the same person that holds the title of chairman of the board. The capital provided for the incorporation must be at least 500,000 SEK approximately 50.000 EUR and the shares can be issued on the stock market.

A Public Limited Company has more credibility and transparency in business compared to an LLC. A public limited company has high financial exposure to source capital from the Public as Equity or debenture or deposit.

A joint stock company may introduce its shares on the stock exchange or any other organized market.

All companies carrying on a business activity are under an obligation to maintain accounting records under the Bookkeeping Act (1976:1259) and are required by the Act to adhere to generally accepted accounting principles. Companies that have assets of more than 38 million SEK as well as those that have over 200 employees, or joint stock companies listed on the stock exchange, have to appoint a chartered accountant.

Both public and private limited liability companies are regulated by the Companies Act (Aktiebolagslag 2005:551)

In terms of company formation, the new act provides for a simplified procedure and improves the following areas::

  1. Swedish company law rules are adjusted to the European company law directives
  2. Rules on share capital and financial instruments are implemented
  3. The corporate organization is improved

Swedish is the official language of Sweden. One very distinct advantage to all the Nordic countries, including Sweden is that the vast majority of Swedes also speak English, and generally to a very high level.

The statutory corporate income tax rate in Sweden is 22 percent. All income of corporate entities is treated as business income.

The standard VAT rate is 25 percent with a reduced rate of 12 percent which applies to, for example, food, restaurant, and catering services, and 6 percent VAT applies to certain products and services such as books, newspapers and the transportation of persons.